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Poland - Public Expenditure Review : Analysis of Social Sectors and Public WagesThis report looks at public spending on
 pensions, education, health, social assistance, labor market
 programs, and public wages. Presenting the findings of a
 series of studies and notes compiled sice April 2009, it
 highlights how reforming such spending, which comprises
 about one quarter of gross domestic product (GDP), is
 essential for mitigating the impact of the economic crisis
 and for transforming Poland from a welfare state to a
 workfare society in line with Government's Vision 2030.
 The report has two main messages. First, Poland can take
 measures to reduce public expenditures on social sectors and
 public wages by around 2.3 percentage points over the next
 three years. Second, beyond supporting the fiscal adjustment
 required in the context of the economic crisis, public
 expenditure reforms can also help bring about structural
 changes envisioned as part of the Government's strategy
 for 2030. This report provides a comprehensive assessment of
 Poland's social sector and public wage polices and lays
 out options for reform. The summary report has five parts.
 The first part lays out the macroeconomic context. It
 emphasizes that Poland has weathered the global economic
 crisis remarkably well but that the recovery is likely to be
 feeble and subject to uncertainty. The next part discusses
 the fiscal fallout of the crisis and argues that public
 expenditure reform should be a crucial pillar for fiscal
 consolidation. Sections three to five contain the main
 findings of the report. Section three presents a list of
 important reforms of public expenditures on social sectors
 and wages in support of Vision 2030. Section four simulates
 the fiscal impact of public expenditure reforms, with a
 particular focus on state budget expenditures. The final
 section discusses how institutional reforms in the areas of
 medium-term and performance-based budget can support the
 reform agenda. Volume two presents the detailed analyses of
 social sectors and institutional reforms of public finance.
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Fiscal Policy in Developing Countries : A Framework and Some QuestionsThis paper surveys fiscal policy in
 developing countries from the point of view of long-run
 growth. The first section reviews existing methodologies to
 estimate the effects of fiscal policy shocks and of
 systematic fiscal policy, with time series or with
 cross-sectional methods, and their applicability to
 developing countries. The second section surveys optimal
 fiscal policy in developing countries, by considering the
 role of the intertemporal government budget, and
 sustainability and solvency. It also reviews the fuzzy
 debate on "fiscal space" and "macroeconomic
 space" - and the usefulness (or lack thereof) of these
 terms for policy analysis. The third section asks what
 theory tells us about the optimal cyclical behavior of
 fiscal policy in developing countries. It shows that it very
 much depends on the assumptions about the interactions
 between credit market imperfections at the individual,
 firms, or government level, and on the supply of external
 funds to the country. Different sets of assumptions lead to
 different implications about optimal cyclical behavior. The
 available evidence on the cyclical behavior of fiscal
 policy, and possible reasons for the observed prevalence of
 a procyclical behavior in developing countries, is also
 reviewed. If one agrees that fiscal policy is indeed less
 countercyclical than we think is optimal, the issue is how
 to correct the problem. One obvious question is why
 government do not self-insure, i.e. why they do not
 accumulate assets in upturns and decumulate them in
 downturns. This leads to the analysis of fiscal rules and
 stabilization funds, in the fourth section. The last
 section concludes with what the author considers important
 research and policy questions in each part.
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Stabilization and Fiscal Empowerment : The Twin Challenges Facing India's States, Volume 1. Executive Summary and Main ReportIndia, home to more than one billion
 people, has experienced rapid growth over the past decade,
 averaging about six percent per year between 1992/93 and
 2003/04. The agenda backed in this report is one that
 receives widespread support from both the central and state
 governments in India. The fiscal stress of the late nineties
 gave rise to an intense state-level reform effort. Six years
 on, this report documents the many initiatives undertaken by
 the states to restore fiscal sustainability, and become more
 effective agents of development. It outlines successes,
 lessons learnt, and highlights further challenges, on both
 the expenditure side (chapter two) and the revenue side
 (chapter three). It also looks at the incentive framework
 within which the states operate (chapter four), and asks
 whether there is a feasible reform package that will take
 the states not only out of fiscal crisis, but strengthened
 to meet the development challenges which confront them. This
 chapter provides the context for what follows by outlining
 the role and increasingly divergent performance of the state
 governments (section two), and then in turn, the genesis of
 the fiscal crisis (section three), its developmental impact
 (section four), the reform response of the state and central
 governments (section five), and the reform challenges facing
 the states today (section six). Although associated with an
 increase in public spending, the fiscal crisis weakened the
 developmental and poverty impact of state governments,
 especially in the poorer states; it also called into
 question India's overall fiscal sustainability. This
 report is written to help share the lessons and
 success-stories to date, and to assist states and the
 central government in implementing the national agenda of
 state-level fiscal stabilization and empowerment. Given the
 low levels and the worrying recent trends in both the
 quantity of expenditure in priority expenditure areas, and
 the quality of expenditure across the board, there is an
 urgent need for expenditure restructuring to free up fiscal
 resources and for reforms to improve the quality of
 spending. Focus in this chapter on areas where expenditure
 can be cut rather than where it should be increased is not
 because we think there are no areas of underfunding.
 However, which particular areas should be increased, and by
 how much, will likely vary from state to state, depending on
 initial conditions, and identified priorities. The areas
 where savings can be made have much more in common across
 states, and so are the focuses of this report.